The elasticity of supply of rental units in New York City is estimated to be about 0.10. Current price restrictions (price floors) are estimated to decrease the price of rental units by 10% below equilibrium price
By how much would price and quantity supplied change if the price floors were removed from the rental unit market in New York City? A) Price will increase by 10% and quantity supplied will increase by 1%.
B) Price will decrease by 10% and quantity supplied will increase by 1%.
C) Price will increase by 10% and quantity supplied will decrease by 1%.
D) Price and quantity supplied will increase by 10%.
A
You might also like to view...
A competitive market is characterized by
a. the absence of entry barriers b. many buyers with a single seller c. imperfect information d. a differentiated product
If inflation had long been 7% and was therefore expected to continue, then it unexpectedly increased to 4% inflation: a. the real interest rate on loans issued just before the change occurred would decrease by three percentage points. b. the real interest rate on loans issued just before the change occurred would increase by three percentage points. c. the real interest rate on loans issued
just before the change occurred would not change. d. none of the above.
Most changes in the money supply are the consequence of a change in the required reserve ratio
a. True b. False
A positive externality exists when ______.
a. a situation occurs where an informed party benefits in an exchange by taking advantage of knowing more than the other party b. the available information is initially distributed in favor of one party relative to another in an exchange c. costs spill over to an outside party who is not involved in producing or consuming the good d. benefits spill over to an outside party who is not involved in producing or consuming the good